By Jeffrey A. Newman Esq
According to recent news reports, Canada has not only cut its tariffs on Chinese cars by 100 percent, it is now discussing joint ventures with China to manufacture a Canadian electric vehicle with Chinese knowledge. Reports describe Ottawa designing an auto policy that explicitly offers better access to the Canadian market for foreign automakers that build in Canada, compared with those who just import, which is clearly an invitation to Chinese EV makers to consider local production.
Under The United States Mexico Canada Agreement (USMCA), a passenger vehicle qualifies for zero tariffs into the U.S. only if at least 75% of its value comes from North America, 40–45% of that content is produced by workers earning at least about 16 dollars per hour, and 70% of its steel and aluminum is North American.These rules apply regardless of the nationality of the parent company: a Chinese‑owned factory in Ontario or Quebec can get USMCA benefits only if it sources the overwhelming bulk of value, and especially core parts like batteries, from U.S./Canada/Mexico and meets the wage and metals thresholds.
In practice, if the design relies heavily on Chinese batteries, electronics, and other high‑value components, the car will likely fail the 75% regional value and related thresholds and be classified as non‑USMCA, meaning it would face the same punitive U.S. China‑focused tariffs (27.5% or higher on autos, over 100% on some EVs) even if final assembly is in Canada. Steel and aluminum rules require at least 70% of the value of these metals to be North American, further limiting the scope for Chinese materials in USMCA‑qualifying autos.
US automakers are responding to China’s EV surge with a mix of defensive trade policy, cost-cutting and platform redesign, partial retreat into hybrids, and targeted investment in batteries and software to close the technology and cost gap.Ford, GM, and Stellantis have slowed or scaled back some U.S. EV launches, pivoting to a “flex” strategy that keeps hybrids and ICE alive while continuing EV development so they can dial volumes up or down as demand and policy shift . GM and Stellantis emphasize flexible plants that can swing between EVs and gasoline vehicles, letting them manage risk while they watch how quickly China, Europe, and U.S. demand evolve. Detroit OEMs openly acknowledge they cannot compete with Chinese EVs unless they cut manufacturing costs dramatically, and executives like Ford’s Jim Farley frame getting “close to Chinese levels” of EV cost as an existential goal. This includes redesigning platforms around simpler, small‑to‑mid‑size EVs, re‑tooling factories, and pushing suppliers on batteries, chips, and electronics to bring down per‑vehicle cost.
U.S. OEMs are investing billions in North American battery plants and supply chains, encouraged by prior IRA‑style credits and newer efforts to reduce dependence on Chinese cells and materials.
Think‑tank and policy voices argue that “just building walls” will leave U.S. OEMs behind; instead they urge more aggressive export‑oriented EV and battery strategies so American brands can contest third markets where Chinese EVs are scaling fastest. See: https://itif.org/publications/2025/09/17/dont-let-chinese-ev-makers-manufacture-in-the-united-states/ .Ford, GM, and Stellantis are still adding EV‑related plants, but with a clear shift toward batteries and flexible capacity rather than big new pure‑EV assembly plant.
BlueOval Battery Park Michigan (Marshall, MI): New LFP battery plant on track to start manufacturing prismatic cells in 2026, supplying Ford’s upcoming midsize electric pickup on its new “Universal EV Platform.” Glendale, Kentucky battery complex: Originally part of the BlueOval SK EV battery program; being repurposed but will still produce LFP cells and modules, including for Ford’s midsize electric truck and for large‑scale energy storage systems starting around 2027
Ultium battery cell plants (U.S.): GM is building out multiple Ultium battery plants in joint ventures with LG Energy Solution; its third U.S. Ultium cell plant in Lansing, Michigan is a multibillion‑dollar facility meant to supply Orion Assembly and other GM EV plants, with production targeted for mid‑decade.StarPlus Energy battery plant (Kokomo, Indiana): First North American battery gigafactory with Samsung SDI, targeting launch in early 2025 with about 33 GWh annual capacity (increased from an original 23 GWh plan).
Jeffrey Newman is a whistleblower lawyer whose firm represents whistleblowers revealing violations of export controls, tariff evasions, money laundering, healthcare fraud and other kinds of WB cases. The firm represents individuals both in the United States and other countries. Mr. Newman and his firm staff also represent many physicians across the country who become whistleblowers in healthcare fraud cases. Whistleblower laws in the U.S. allow individuals anywhere with information about export control violations or tariff fraud to reveal the information under The False Claims act or through the Securities and Exchange Commission’s Whistleblower Program. The Firm’s website is at www.JeffNewmanLaw.com and attorney Newman can be reached at Jeff@Jeffnewmanlaw.com or at 978-880-4758
